When debt consumes our life, we feel it everywhere -- in our bank accounts, at the grocery store, and most definitely in our marriage. But there are painless ways to get your life and finances back on track. Here's where you should start.

1. Quit buying on credit. Put your credit cards on ice (some people actually pop them in a bowl of water in the freezer), then stick to cash. If you can't afford to buy with what's in your wallet — or on a debit card — pass it by. Don't Miss: Been Laid Off? How to Keep Your Finances Afloat

2. Post your debts. Make a list of the amounts you owe on each credit card and tape it to the refrigerator. Next to each debt, write the interest rate and the minimum monthly payment required (or the larger monthly payment you intend to make). List the debts in order of size, the smallest first. (If you're paying off a big medical bill or student loan, include that too.)

Then, every month, pay the fixed amounts you put on the list. As the bills shrink, your creditors will reduce the minimum payment. After all, they want to keep you paying for as long as possible. But don't succumb. The key to this get-out-of-debt strategy is keeping your payments level, so you'll be reducing more of the principal every month. When one credit card is clean, apply that payment to your other cards. After a few months, you'll be surprised at how rapidly those debts have declined. Don't Miss: Helpful Hints for Sticking to a Budget

3. Find cheaper consumer credit. If you're paying high interest rates on your credit cards — some creditors charge as much as 25 percent — it may make sense to transfer your debts from your present cards to one of the new low- or no-interest cards. But be sure to read the fine print. The teaser rate on many of these cards doesn't last long — usually six months. So shifting debt is best for people who know they can pay it off before the rate goes up. Don't Miss: Never Pay Credit Card Late Fees Again

If you do transfer, be vigilant about paying on time. Just one late payment will immediately push you to a higher rate. And don't forget to cancel your old card or you'll soon be racking up charges on it again.

4. Don't play games. It can be tempting to borrow from one card to pay off another. But you'll just be digging a deeper hole for yourself. In addition, you pay more in interest rates and fees on cash advances.
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5. Beware the home equity loan. If you wipe out your credit card debt by borrowing against your house, you'll probably run up your cards all over again. Then you'll have credit card debt and a higher mortgage payment. Once you're living on cash rather than on credit, you might consider a low-rate home equity loan to pay off the remaining debt. Don't Miss: Learn How to Lower Home Bills and Expenses

6. Get help. If you can't make it through a month without using your card, or if you can't seem to make any progress digging out of debt yourself, go to a reliable credit counselor. For a modest fee, a counselor will negotiate with your creditors to lower the interest rate or stretch out payments. You pay a monthly check to the counseling firm, and then it doles out the agreed amount for each bill.

Your best bet is to use one of the 140 affiliates of the National Foundation for Credit Counseling (800-388-2227 or nfcc.org), a well-regarded credit counseling network. Or, you can call each creditor yourself and work out your own payment plan.

A warning: There are lots of disreputable credit counselors out there. To protect yourself, don't choose one who claims you'll pay 75 percent less than you owe (you'd be walking away from some debts, which will wreck your credit rating), tells you to quit making your payments while the "counselor" negotiates (you'll be dunned and possibly sued), urges bankruptcy when it's not necessary, or demands a substantial fee up front. Don't Miss: Warning! Beware of Advice That Can Get You in Deeper Debt

7. Keep your eye on the big picture. Now that you're on your way to getting your credit card debt under control, here are some guidelines for managing the rest of your debt.

A new home shouldn't cost more than two and a half times your gross annual income. And remember — the bigger the house, the more expensive the yearly upkeep.
Total monthly debt repayments shouldn't exceed 36 percent of your gross monthly income, including credit card payments, car payments (including a lease), home expenses (interest, principal, taxes, and insurance), and any other long-term loans.
Your combined interest payments on all loans should be less than 3 percent of your gross annual income. If you're paying up to 5 percent of your income, think about taking on another job; finding a cheaper, fixed-rate mortgage; or moving to a less expensive house. At 9 percent, there may be no option but bankruptcy.
How do you control your credit and work to stay out of debt? What are your penny-pinching tricks?

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